Open Letter to David Morrison, CEO of Yukon Energy and to Premier Fentie, minister Responsible for Yukon Energy/Yukon Development Corporations:
Your Yukon Energy propaganda machine was out in full force last week, spinning your tales of success and glory concerning Mayo B and Stage 2 of the Carmacks-Stewart transmission line.
If it were one of your disputants, strutting their stuff in front of the media, you would be crying wolf that nothing should be said about these projects, in public, when the proposals are in front of two regulators, the Yukon Environmental and Socio-economic Assessment Board as well as the Yukon Utilities Board.
Since you opened the can of worms, let us look at each of these two major projects individually.
Mayo B will cost at least $120 million for an extra five megawatts of power. That’s $24 million a megawatt. And that’s totally insane.
Diesel generators to provide Alexco with its needed energy would cost maybe $5 million, and they could pay for their own fuel. Here’s a novel idea: why don’t you sell them the diesels you bought from Minto, which are sitting idle, and give this money back to Yukoners?
Do you really expect to sell power to Carmacks Copper in the near future? Do you think this mine will be allowed to open up, proposing to use unproven heap leaching methods in First Nation territory? And how much would a power plant cost them, anyways? Let them pay for their own power and their own fuel.
Oh, I forgot, you spin this project as environmentally friendly because it will displace 700 tonnes of greenhouse gases per gigawatt hour. Tell us about the hundreds of thousands of carbon particles consistently discharged into the air during construction of this project and the Carmacks-Stewart transmission line project. Or tell the fish in Mayo Lake, whose offspring you will be killing by draining another metre of water in their spawning habitat.
And then tell us how environmentally friendly all these industrial customers will be, whom you are building this infrastructure for.
Oh, you say these projects are shovel ready and must be completed soon to take advantage of the federal funding. That this gift, along with the Yukon Development/YTG money is “no-cost money” as it will not go into the rate base. Will it just magically appear?
Tell us how it is needed to prop up this project that is economically nonviable without such funding. I know it was just Saint Patrick’s Day, so bets are the leprechauns will make this money appear. Tell us about how you will still need to place $36.5 million into the rate base. Who will pay for this and for the operation and maintenance of the facilities for the next 60 years?
Tell us how Yukon Energy will make at least twice as much money off industrial sales as what the Yukon resident will benefit from. Tell us how the mines will profit from far cheaper power than if they had to produce their own.
Now let’s look at the transmission line project, which is forecast to cost $40 million. The contract for construction for the line is now projected to be $11 million and the engineering and clearing costs maybe another $5 million. Tell us what the other $24 million is for.
Tell us how the “no-cost” money is the only way this project could also pass the litmus-business-case feasibility test by the Yukon Utilities Board.
Now let’s add some meat to the matter. You suggest these projects will not cost ratepayers any money, that it will not have any impact on residents.
You suggest these projects will actually lower future bills for residential ratepayers when completed.
You said the same thing about Stage 1 of the transmission line project, and the hooking up of the Minto mine.
What actually transpired at the last utilities board hearing was that it, in its infinite wisdom, accepted the $1-million forecast savings in increased revenue from the selling of new power to Minto (actually more than $3 million worth of electricity was sold to Minto; where did the other $2 million go?), but then gave Yukon Energy very near to the same amount to lowball the sales of secondary power.
The result: No savings!
Tell us how next year, if nothing is done to remedy this bad decision, this will cause our rates to go up.
You then spin your same old argument that rates will decrease due to sales of more power.
But in reality, you plan to change the rate design so a household that uses less than 1,000 kilowatt hours a month will pay less and thus receive a benefit, but those who use more than this threshold will pay more.
So only those who can afford up-front cash to make their homes more energy efficient, taking advantage of government grants, will benefit at the cost to their neighbour who cannot, as they are marginal consumers with no money to spare.
Tell us how this is simply a residential cross-subsidization and not a lowering of our rates that you are promising.
Oh, it will be for your greenies whose mantra is ‘pay the true costs of energy.’
What is the true cost?
Do you presume a study done by the utilities, themselves, will give us this magic number? Oh yes, your mainstream yuppies, who work for some form of government and make wages similar to yours (that’s four zeros behind the 14, Martha) will prosper more, at the expense of the working poor.
Tell the family of six, who may be good energy conservationists, but need more power to heat their water for preparing and preserving food, bathing/laundry and likely need a bit larger home to operate and maintain, that they will be paying higher electrical bills with your plan so that their richer professional neighbours with no children but a well-insulated hot tub can benefit.
Tell the working single mother with two children, who has electric heat in a rental unit, that she will now have to pay more to benefit her neighbours.
Tell the pensioners, who live in their own home and are on a set income, now using electric heat as they can no longer manage wood or other alternatives, how your plan will have them paying more to benefit their neighbour.
Until Yukon Energy and Yukon Electrical Company Ltd. can provide their ratepayers with reliable and affordable energy, we will need a commitment for the continuation of the electrical power rate subsidy from your government. Otherwise, we will lose more Yukoners who can no longer afford to live here!
And, in case you haven’t checked your bills lately, they just went up some 6.4 per cent per month in January, albeit for Yukon Electrical’s profit.
Roger Rondeau,
Utilities Consumers’ Group
Whitehorse